The Effect of RMB Revaluation in the Economy of China Table of Contents List of Tables 4 List of Figures 4 Chapter 1: Introduction 5 1.1Background of the research problem 5 1.2Statement of the research problem 5 1.3Research objectives 5 1.4Research questions 6 1.5Significance of the research problem 6 1.6Definition of terms 7 Chapter 2: Review of Related Literature 9 2.1 Chapter Overview 9 2.2 Currency revaluation and its effects 10 2.3 The fixed vs. ...
The director also drew a plan of action if China did not withdraw the control of currency and permit the renminbi (RMB) to gain strength. The central bank of China known as the People’s Bank of China allowed for some relaxation. The bank announced that will abandon the two year old peg. The peg has kept the RMB with the dollar (Yu, 2010, p. 2). It allowed RMB to respond according to the forces of the market. China will now begin to move into the regime of floating exchange rate. The regime will be a tight one which was in practice in the period between 2005 and 2008. The value of RMB will be the base on a basket of currencies within a narrow range (Wharton University of Pennsylvania, 2010). China believed that the stable RMB policy is good for the country from the time of the financial crisis of Asia. The country turned away from the exporters who were reported for violating the standards of pollution. The strengthening of the RMB against the U.S. dollar has continued unabated since 2005. It will follow the stable rising path since the country is under intense inflationary pressure (Wang and Whalley, 2007, p. 3). 1.2 Statement of the research problem The problem this dissertation seeks to resolve is: What effects shall the revaluation of the renminbi have in China’s economy, as well as in the world economy? The principal goal of the dissertation is to identify the impacts of the revaluation of the RMB on the economy of China. 1.3 Research objectives In adopting the research problem specified above, the research undertakes to achieve the following objectives: (1) To examine the necessity of a currency revaluation in
The aim of the study is to analyze the economical condition of China, the developments made by the Chinese government, which made the country one of the most developed countries in the world. The researcher will also analyze that whether the future of the economy is also strong. To make the economy strong, the government has to make certain policies so that the base of the economy becomes strong.
The effect of RMB revalue to the economy of China.
The research study will take into consideration the revaluation of RMB and the effect it had on the economy of China. The revaluation of RMB has been in the limelight in the recent discussions on political and economic affairs.
The country earns the attraction of potential foreign investors owing to the incidence of cheap human resources with potential resource base. Foreign Direct Investment thereby gains an entry into the region mainly through the events like mergers and acquisitions or through the foreign trade earned from export activities.
Globalization increased international trade across countries, increasing business opportunities and investments and contracting boundaries between nations across the world. However, it has also resulted in stiff competition among the business organizations and hence created barriers for the entrance of new potential business firms.
Keeping in view the research aim and objectives of this study, the researcher has made use of both, qualitative and quantitative research techniques; i.e. a mixed approach has been followed by the researcher in this research work. Each approach has served different objectives set for this study.
The effect of the U.S. Subprime Crisis to the China commercial banks in 2008-2013.
The sub-prime mortgage crisis that originated in the United States of America basically started from August 2007 and had transformed the financial markets around the world.
The Sino economy has gathered further momentum. That was the reason that Chinese economy registered a real GDP growth of phenomenal 9.5 percent in 2004. China’s status of “world factory” is the result of that impressive growth show. The excellent performance of economy paved a way to massive capital inflows.
The rip-roaring regional growth showed in the 10-fold increase in per capita income in South Korea, five fold in both Thailand and China, four-fold in Malaysia. Estimates were that as much as $100 billion in foreign money flowed into Southeast Asia alone in the form of short-term loans and portfolio investments.
The author states that financial market reforms were central to China’s commitment to the World Trade Organization, in which China became a member in 2001. Following China’s WTO membership, international investors gained easier access to the financial market. The Chinese government is trying to change the function of the two existing stock exchanges.
22 pages (5500 words)Dissertation
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